Reference

Glossary Terms

Browse our comprehensive glossary of terms. Search, filter by topic, or navigate alphabetically.

463 Total Terms
18 Topics

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8 terms
10-Q The 10-Q is a detailed financial report that publicly traded companies in the United States must file with… Financial Statements & Accounting Stocks & Equity Markets 12b-1 fee A 12b-1 fee is an annual fee charged by some mutual funds to cover the costs of marketing,… Mutual Funds, ETFs & Pooled Vehicles 457 plan A 457 plan is a type of tax-advantaged retirement savings account offered to employees of state and local… Retirement Planning

A

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Ask The ask (also called the ask price or offer price) is the lowest price a seller is willing… Financial Markets & Market Mechanics Active investing Active investing is a hands-on approach to building and managing an investment portfolio. Instead of simply tracking a… Investing Fundamentals Adjusted gross income (AGI) Adjusted Gross Income (AGI) is a key number used in the United States tax system. It represents your… Taxation

B

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Budget deficit A budget deficit occurs when a government’s total expenditures exceed its total revenues over a specific period, typically… Monetary & Fiscal Policy Beneficiary A beneficiary is a person, organization, trust, or estate that is legally designated to receive assets or benefits… Insurance & Risk Protection Bid-ask spread The bid-ask spread is the difference between the highest price a buyer is willing to pay for an… Stocks & Equity Markets

C

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Commercial bank A commercial bank is a financial institution that provides a wide range of services to individuals, businesses, and… Banking & Depository Institutions Credit report A credit report is a detailed record of an individual’s credit history, compiled by consumer reporting agencies (often… Credit, Debt & Lending Current ratio The current ratio is a financial metric used to measure a company’s ability to pay its short-term obligations… Financial Ratios & Analysis

D

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Debt-to-equity The debt-to-equity (D/E) ratio is a key leverage ratio that compares a company’s total liabilities to its shareholder… Financial Ratios & Analysis Debt ceiling The debt ceiling (also known as the debt limit) is a legal cap set by the United States… Monetary & Fiscal Policy Default Default is a financial term that describes the failure of a borrower to meet the legal obligations or… Credit, Debt & Lending

E

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Expense ratio The expense ratio is the annual fee that all mutual funds, exchange-traded funds (ETFs), and other pooled investment… Mutual Funds, ETFs & Pooled Vehicles Early withdrawal penalty An early withdrawal penalty is a fee imposed by the Internal Revenue Service (IRS) when you take money… Retirement Planning Escrow Escrow is a financial arrangement in which a neutral third party, known as the escrow agent, holds funds,… Real Estate & Mortgage Finance

F

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Form S-1 Form S-1 is a registration statement filed with the Securities and Exchange Commission (SEC) by companies planning to… Financial Regulation Free cash flow (FCF) Free cash flow (FCF) is the cash a company generates after spending the money required to maintain or… Corporate Finance Federal funds rate The federal funds rate is the interest rate at which depository institutions (such as banks and credit unions)… Monetary & Fiscal Policy

G

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Growth stock A growth stock is a share in a company that is expected to grow at an above-average rate… Stocks & Equity Markets Gross profit Gross profit is the profit a company makes after deducting the costs directly tied to producing and selling… Financial Statements & Accounting Gross income Gross income is the total amount of money you earn from all sources before any deductions or taxes… Personal Finance & Money Management

H

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Hawkish vs. dovish In the world of central banking and monetary policy, the terms hawkish and dovish describe the general attitude… Monetary & Fiscal Policy Homeowners insurance Homeowners insurance is a type of property insurance that protects an individual’s home and personal belongings against damage,… Insurance & Risk Protection HSA (Health Savings Account) An HSA, or Health Savings Account, is a tax-advantaged savings account that you can use to pay for… Insurance & Risk Protection

I

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Inflation Inflation is the rate at which the general level of prices for goods and services rises over a… Economics for Finance Income statement An income statement is one of the three core financial statements used by businesses, investors, and analysts to… Financial Statements & Accounting Internal rate of return (IRR) The Internal Rate of Return (IRR) is a powerful financial metric used to evaluate the profitability of potential… Corporate Finance

J

2 terms
Jumbo loan A jumbo loan is a type of mortgage used to finance properties that are too expensive for a… Real Estate & Mortgage Finance JOBS Act The JOBS Act, officially the Jumpstart Our Business Startups Act, is a landmark piece of U.S. legislation signed… Financial Regulation

L

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Labor force participation rate The labor force participation rate (LFPR) is a key economic metric that measures the percentage of a country’s… Economics for Finance Liquidity Liquidity is a financial concept that describes how quickly and easily an asset can be bought or sold… Financial Markets & Market Mechanics Long-term capital gains Long-term capital gains are the profits you earn from selling an asset that you have held for more… Taxation

M

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Money market account A money market account (MMA) is a type of deposit account offered by banks and credit unions that… Banking & Depository Institutions Money supply – M2 Money supply M2 is a broad measure of the total amount of money in an economy. It includes… Monetary & Fiscal Policy Modified adjusted gross income (MAGI) Modified Adjusted Gross Income (MAGI) is a critical calculation used by the Internal Revenue Service (IRS) to determine… Taxation

N

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Needs vs. wants Needs vs. wants is a fundamental concept in personal finance and budgeting that helps individuals distinguish between essential… Personal Finance & Money Management Non-discretionary spending Non-discretionary spending, also called essential or mandatory spending, refers to expenses that are necessary for basic living and… Personal Finance & Money Management Net worth Net worth is a snapshot of your financial health at a single moment. It is calculated by subtracting… Personal Finance & Money Management

O

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Overdraft An overdraft occurs when you spend more money than you have available in your checking account. In simple… Banking & Depository Institutions Over-the-counter (OTC) Over-the-counter (OTC) trading refers to a decentralized market where financial instruments are traded directly between two parties, without… Financial Markets & Market Mechanics Opportunity cost Opportunity cost is the value of the next best alternative that you give up when you make a… Economics for Finance

P

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Passive investing Passive investing is a long-term investment strategy that aims to match the performance of a broad market index,… Investing Fundamentals Principal Principal is the original sum of money borrowed in a loan or the original amount invested, before any… Credit, Debt & Lending Pecking order theory The pecking order theory is a corporate finance concept that explains how companies prioritize their sources of financing.… Corporate Finance

Q

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Quick (acid-test) ratio The quick ratio, also known as the acid-test ratio, is a stringent measure of a company’s short-term liquidity.… Financial Ratios & Analysis Quantitative easing (QE) Quantitative easing (QE) is an unconventional monetary policy tool used by a central bank — like the U.S.… Monetary & Fiscal Policy Qualified dividend A qualified dividend is a type of dividend payment that meets specific criteria set by the Internal Revenue… Taxation

R

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REIT (Real Estate Investment Trust) A Real Estate Investment Trust, commonly known as a REIT (pronounced “reet”), is a company that owns, operates,… Real Estate & Mortgage Finance Real GDP Real GDP (Gross Domestic Product adjusted for inflation) is a critical economic measure that reflects the total value… Economics for Finance Return on assets (ROA) Return on Assets (ROA) is a key profitability ratio that measures how efficiently a company uses its assets… Financial Ratios & Analysis

S

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Stock split A stock split is a corporate action where a company increases the number of its outstanding shares by… Stocks & Equity Markets Supply and demand Supply and demand is a fundamental economic model that explains how prices are determined in a market economy.… Economics for Finance Securities Exchange Act of 1934 The Securities Exchange Act of 1934 is a landmark United States federal law that created the legal framework… Financial Regulation

T

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Term life insurance Term life insurance is a type of life insurance policy that provides coverage for a specific period, or… Insurance & Risk Protection Tax-exempt Tax-exempt means that certain income, transactions, or entities are not subject to federal or state income taxes. This… Taxation Treasury notes Treasury notes, often called T-notes, are debt securities issued by the U.S. Department of the Treasury. They are… Bonds & Fixed Income

U

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Unemployment rate The unemployment rate is a key economic indicator that measures the percentage of the labor force that is… Economics for Finance Universal life insurance Universal life insurance is a type of permanent life insurance that offers flexible premiums, adjustable death benefits, and… Insurance & Risk Protection Unsecured debt Unsecured debt is a type of loan or credit that is not backed by any form of collateral.… Credit, Debt & Lending

V

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Volatility Volatility is a statistical measure of the dispersion of returns for a given security or market index. In… Investing Fundamentals Vesting Vesting is a legal and financial term that refers to the process by which an employee earns the… Retirement Planning VA loan A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans… Real Estate & Mortgage Finance

W

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Working capital Working capital is a financial metric that represents the difference between a company’s current assets and current liabilities.… Corporate Finance W-2 A W-2 form, officially called the “Wage and Tax Statement,” is a crucial tax document that employers in… Personal Finance & Money Management Wash-sale rule The wash-sale rule is a regulation by the Internal Revenue Service (IRS) that prevents investors from claiming a… Taxation

Y

3 terms
Yield to maturity (YTM) Yield to Maturity (YTM) is the total return anticipated on a bond if it is held until it… Bonds & Fixed Income Yield Yield is a financial term that measures the income generated by an investment, typically expressed as a percentage… Investing Fundamentals Yield curve The yield curve is a graphical representation that shows the relationship between interest rates (yields) and the time… Bonds & Fixed Income

Z

2 terms
Zero-coupon bond A zero-coupon bond is a type of bond that does not pay periodic interest payments (coupons) to its… Bonds & Fixed Income Zero-based budgeting Zero-based budgeting (ZBB) is a method of budgeting where every expense must be justified for each new period,… Personal Finance & Money Management